China Box Office Shrinks for First Time in Half a Decade

After years of surging growth, China's box office experienced a 4.6 percent decline in the second quarter of 2016, with the first-half gain of 21 percent its lowest in years.

A few months ago, it would have seemed inconceivable.

China's box office shrunk nearly five percent in the second quarter of 2016, according to leading local sources.

Coming after a historic run of relentless growth, fueled by a nationwide cinema construction boom, the fall marks the Chinese theatrical market's first year-on-year quarterly decline in over half a decade.

In the first quarter of 2016, China's box office expanded an astonishing 50 percent, hitting 14.49 billion yuan (roughly $2.2 billion) compared to 9.66 billion yuan ($1.4 billion) the year prior. In February, the China market totaled more than $1 billion, topping North America for the second month ever.

But from April to June of this year, Chinese ticket sales slid to $1.51 billion, down 4.6 percent from the $1.58 billion tally in the second quarter of 2015, Beijing-based box office monitor Ent Group tells The Hollywood Reporter exclusively (official Q2 data is expected from Chinese regulators next week). The last time China's box office experienced such a fall was the first quarter of 2011.

Combining the two quarters, China's growth rate fell to 21 percent in the first half of the year. That would be a phenomenal rate of expansion for any other major film territory, but for China it marks a considerable slowdown from 2015's full-year growth rate of 48.7 percent (China's box office hit $6.78 billion last year, up from $4.82 billion in 2014). Chinese broadcaster CCTV's movie site,1905.com also estimates a 21 percent growth rate for the first half.

The huge gains in the first quarter primarily were fueled by a trio of local blockbusters released during the Chinese New Year holiday in February, during which time foreign imports are barred by regulators from the market: Stephen Chow's The Mermaid grossed a record $528 million; The Monkey King 2 took in $185.4 million; and From Vegas to Macau 3 collected $172.1 million. Zootopia, the biggest Hollywood film in China so far this year, earned most of its massive $235.5 million in March.

The biggest pictures in the second quarter — a period usually dominated by imported Hollywood fare — were Legendary's breakout local hit Warcraft with $220 million; Captain America: Civil War at $190.4 million; The Jungle Book with $150.1 million and X-Men: Apocalypse at $118.6 million (Warcraft and X-Men remain on release but both earned the vast majority of their total in June).

Those are big numbers, but they're conspicuously less than the totals put up by the top Hollywood imports in Q2 2015: Furious 7, $390.9 million; Avengers: Age of Ultron, $240.1 million; and Jurassic World, $228.7 million.

In the first half of this year, local Chinese films accounted for 53.1 percent of box office over imports, compared to imports taking a majority 53.2 percent share in the first six months of 2015.